Best way to give $ to a newborn?

[AllDone]

What's the best way to give a gift to a newborn to kick off a college fund? The parents don't have much money and the granddad is kind of a conman. We'd like to kick in a grand or so, but we'd like to see it go into savings rather than one of grandpa's money making schemes.

 

[REattempt]

529 plan.

Utma/ugma with you as the administrator, contribute up to gift allowance without tax.

Two options for you...

 

[AnIntentionalRoad]

Look in to how colleges account for the different account types when determining financial need. It could make a big difference when they turn 18.

 

[calmloki]

For a newborn dimes are better than quarters - easier to swallow.

 

[REWahoo]

For a newborn dimes are better than quarters - easier to swallow.

And to pass...

 

[Brat]

When we lived in WA we established college accounts for each grandchild there. The way it works is that you buy a credit unit at today's prices and they pay out at the $ a credit is worth when the brilliant grandchild needs it.

 

[38Chevy454]

I asked this a while back, and for me the best option was a 529 plan. I even get to take a state tax deduction for the contribution, check your state's rules.

 

[mystang52]

I bought an I Bond for my newborn grandson

 

[Gill]

I bought an I Bond for my newborn grandson

This doesn't work well anymore. The child would have to have an account with Treasury Direct because paper bonds are no longer issued.
Bruce

 

[Gill]

529 plan.

Utma/ugma with you as the administrator, contribute up to gift allowance without tax.

Two options for you...

Giving a gift under UGMA and acting as the custodian yourself doesn't remove the gift from the donor's estate. 529 plan is a better alternative.
Bruce

 

[mystang52]

This doesn't work well anymore. The child would have to have an account with Treasury Direct because paper bonds are no longer issued.
Bruce

Incorrect. The child does have to have a Social Security number, which per my son is now done automatically. In any event, it took about two weeks. Then, I went into MY Treasury Direct account and bought the gift bond. The record is on my account, but my grandson (with his SS #) is the owner of the bond. My son has a record of the purchase as well.

 

[Gill]

Incorrect. The child does have to have a Social Security number, which per my son is now done automatically. In any event, it took about two weeks. Then, I went into MY Treasury Direct account and bought the gift bond. The record is on my account, but my grandson (with his SS #) is the owner of the bond. My son has a record of the purchase as well.

I guess I didn't state it clearly. There is no way anymore to give a paper bond and neither the child nor the parent have a record of the gift. The "electronic" bond is held in the donor's account which can only be accessed by the donor. Not the most satisfactory arrangement for making a gift.
Bruce

 

[mystang52]

I guess I didn't state it clearly. There is no way anymore to give a paper bond and neither the child nor the parent have a record of the gift. The "electronic" bond is held in the donor's account which can only be accessed by the donor. Not the most satisfactory arrangement for making a gift.
Bruce

Yah, from that perspective I agree, especially as a gift to a non-family member.